1) Glad my mom, who lives in a popular resential of Charlotte with ever-expanding shopping complexes, just sold her home with plans to move into a retirement community. One less private property issue to worry about.

2) Feeling kind of righteous that I’ve been out of the home ownership sphere the last few years. No worries about the gov’mint stealing my house (neener, neener). Conversely, one day I’d like to get back into home ownership so I have a whole new set of future worries.

3) A good friend has multiple adjacent waterfront properties on a lake north of Houston (within a 90-min drive). Boy is she screwed.

« Government Taking Private Land Government Taking Land, Part II A comme [...]

Thanks, I will see what I can dig up and possibly start a Part Deux.

The Strata-Sphere » Government Taking Private Land
Read this and maybe you’ll understand why so many people are worried.
Someone, somewhere thought that this ruling might signal the end of the Real Estate boom – a chilling thought if you&#821…

Yes ,I am aware of prop 13 and how ridiculous it was. I gather everyone agrees in hindsight that there should have been some level of value escalation.

Here Proposition 13 controls property taxes. Assessed value is established when property is sold. Thereafter it can increase a maximum of 2% per year, and taxes are limited to 1% of assessed value. That means a lot of property that hasn’t changed hands is paying very little in taxes.

Some of that property is large, industrial stuff, like oil refineries and manufacturing plants. When one of these properties gets sold, it’s usually the underlying corporation that gets sold, not the real estate itself. So some of these places have been unsold since Prop 13 went into effect in 1978. In the 27 years since the assessed value has marched up 2% per year – a total of a 70% increase in value and taxes, while the *real* value has gone up 700-900%.

Houses are similar. Communities with large populations of older people don’t get the benefit of property value increases, because older people move less, and keep their assessed values down.

The theory, then, is that a city can condem a piece of property, pay fair market value for it, and then resell it at the same value just to get the 10 fold increase in property taxes. It doesn’t have to be re-sold to a new owner – it can go back to the previous owner, even at a slight discount – and the city makes their money in increased taxes.

If the owner can’t pay the increased taxes – like someone on a fixed income that owns their home outright – they have no choice but to move somewhere cheaper. By putting higher income people in the property, the neighborhood’s overall value is increased too.

There are some VERY tempting pieces of property out there. The Irvine Company 95000 acres of Orange County, CA, some of the most expensive real estate in the nation. They’ve developed much of their land in recent decades. But even those who buy the new homes lease the land on long term leases – Irvine retains ownership, and so the assessed value creeps up at 2% per year. Today the land is assessed at under $10,000 per acre – and is really worth $200-$500,000 per acre, depending on location and improvements. Increased property tax revenues from condemned and resold Irvine land alone would be worth $350-$550 million per year.

Other prime property – theme park, any large office building, large shopping malls, movie studios, apartment complexes, retirement communities, resorts, hotels and marinas.

George Steinbrenner must be dancing at the prospects.

I just blogrolled you.

Tom Blumer
Mason, OH
513-3336-7121
http://www.bizzyblog.com
biz@bizzyblog.com